Fund Management Companies in Singapore

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Unregistered fund manager who wants to start a crypto fund. How should I structure this?
  • What is a Fund Management Company?

    • According to MAS (Pages),
      last revised 16 August 2021

      If a company raises and manages third party investors’ funds in a collective investment scheme, or invest them in segregated accounts into capital markets products, such as equities, fixed income and financial derivatives, it is conducting fund management and would need to be licensed or registered to do so. On the other hand, if a company is managing proprietary monies, or monies belonging to a single party or group of related entities, it is likely to be able to be exempt from licensing or registration. Please see the next section on licensing exemptions for additional reference.

      If the scope of a company’s fund management activities falls within certain categories, it may be eligible for an exemption from licensing or registration to conduct fund management. Examples of such companies are those that:

      • Manage a pool of immovable assets for accredited and institutional investors;
      • Manage funds for related corporations; or
      • Manage moneys belonging to a single group of related family members.

      In certain scenarios, companies may need to apply to MAS specifically for exemption if they do not fall neatly within the pre-defined scope of exclusion. You can find more information on exemptions under section 99 of the SFA and paragraph 5 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations.

  • What is a Fund Manager?

    • A fund manager is responsible for implementing a fund's investing strategy and managing its portfolio trading activities. A fund can be managed by one person, by two people as co-managers, or by a team of three or more people.

      Fund managers are paid a fee for their work, which is usually a percentage of the fund's average assets under management (AUM). They can be found working in fund management with mutual funds, pension funds, trust funds, and hedge funds.

      Traditionally, a fund manager does not handle client money and or the custody/trustee because of potential conflict of interest.

      In Singapore, Fund managers must be licensed (see Licenced Fund Management) by the MAS.

  • I want to set up a fund in Singapore. What is the regulatory framework?

    • According to MAS (Guidelines)
      last revised on 17 September 2018

      The activity of fund management is defined in the Second Schedule to the SFA. A corporation that carries on business in fund management in Singapore would need to either hold a CMS licence in fund management or be registered with MAS as an RFMC.

  • What type of fund management company applies to my business?

    • According to MAS (Guidelines)
      last revised on 11 August 2021

      RFMCs [...] carry on business in fund management with no more than 30 qualified investors (of which no more than 15 may be funds or limited partnership fund structures) AND the total value of the assets managed does not exceed S$250 million.

      Retail LFMCs [...] carry on business in fund management with all types of investors, without restriction on the number of investors.

      Accredited Investor LFMCs [...] carry on business in fund management with qualified investors only, without restriction on the number of qualified investors.  

      "In most (if not all the cases), the determining factor for the choice between being a CMSL holder for the regulated activity of fund management or a RFMC is the estimated assets under management (“AUM”) of the FMC. If it is estimated that the FMC’s AUM will be close to or more than S$250 million, the FMC will have to apply to be licensed as an A/I LFMC because the total AUM of a RFMC cannot exceed S$250 million. A RFMC can subsequently apply to become an A/I LFMC as its AUM grows and is expected to exceed the relevant threshold."

      Source: Simmons & Simmons LLP

      Note that the types of investors are also different for each fund:

      • "Registered FMCs – FMCs with less than S$250 million Assets Under Management (AUM) and which serve not more than 30 qualified investors (of which not more than 15 are funds). Registered FMCs will replace the current category of Exempt FMCs.
      • Licensed A/I FMCs (A/I LFMCs) – FMCs with more than S$250 million AUM and that serve only accredited and/or institutional investors.
      • Licensed Retail FMCs (R LFMCs) – FMCs with more than S$250 million which serve retail investors"

      Source: Rivkin